Tuesday, June 28, 2016 - Posted by Michael McCulloch
In a most recent article on our blog we revealed that the ACCC had commenced Court action against ACM Group
We can now reveal that in the case of the resident in a care facility that the debt for $5,768.53 was purchased from Telstra by ACM.
It has been alleged:
- The customer was contacted by phone on more than 40 occasions to demand payment;
- 20 demand letters were sent to the customer between April 2011 and June 2015;
- It was communicated to ACM that the customer could not care for himself;
- The customer was in receipt of a Government pension; and
- He was unable to service debt.
While ACM did take steps to make reference this in their customer log the debt was subsequently returned to a debt recovery campaign.
ACM has recently released a statement regarding the allegations on 02/06:
"ACM Group Ltd has today been notified that the Australian Competition and Consumer Commission (ACCC) has commenced civil proceedings against it in the Federal Court of Australia alleging breaches of the Australian Consumer Law in the recovery of two small Telecommunication debts.
The allegations made by the ACCC regarding the two accounts, are not representative of our hundreds of employees nor of our over 165,000 customers.
Further, the two matters do not reflect the incremental change management processes ACM has embarked on. By mid-2015, ACM had implemented numerous processes to ensure compliance and improve customer interaction. Also in 2015, to assist in positive outcomes for our customers, ACM worked with a consumer advocate to rewrite all staff training material and customer correspondence.
ACM is mindful that these matters are now before the Federal Court, and as such, it is inappropriate to make further comment".
While the statement by ACM regarding "incremental change management processes" is certainly a positive sign for future cases one would question as to why this activity existed in the first place especially with the ASIC / ACCC Debt Collection Guidelines originally being published in 2005 and subsequently updated to reflect significant changes to the law.
Unfortunately for those in the industry, that are compliant, the negative stigma attached to the industry continues with stories like this and will no doubt, in the future, require the industry to be more heavily regulated.
Wednesday, June 04, 2014 - Posted by Michael McCulloch
In a recent Victorian Supreme Court matter, Financial Ombudsman Services Limited v Pioneer Credit Acquisition Services Pty Ltd  VSC 172, an interesting outcome occurred in relation to collection action being undertaken on debts approaching the statute of limitations.
Pioneer are a debt collection agency who purchase debts and collect debts for clients. They purchased a debt ledger where the debts originated in the UK. The majority of the debts were from Barclays Bank. The case concerned debtors who moved to Australia. The debts acquired were subject to the Consumer Credit Act 1974 (UK).
In July 2009 a complaint was made to The Financial Ombudsman Service (FOS) disputing the amount of a debt, and that a default listing had been made in these circumstances. In September 2009 Pioneer advised FOS the matter would be statute barred in November 2009 and sough consent to initiate legal action. FOS consented to the commencement of proceedings in Western Australia on
the provision that the proceedings not be served on the defendant until
the matter had been determined, and if the determination was unfavourable the proceedings be discontinued.
On another debt, a debtor made a complaint to FOS on 4 December 2009. Pioneer contact FOS to seek consent to commence legal proceedings because the debt would otherwise become statute barred on 12 January 2010. FOS consented to the commencement of proceedings in Western Australia on the provision that the proceedings not be served on the defendant until the matter had been determined. FOS subsequently found that once proceedings were commenced in Western Australia, unless a debtor lodged a defence, an automatic listing would be recorded against the debtor. Upon learning this, FOS withdrew its consent to commence legal proceedings. Despite this Pioneer commenced proceedings on 7 January 2010.
FOS made a determination that the debts were unenforceable in Australia.
The dispute between Pioneer and FOS
The dispute between Pioneer and FOS was a contractual dispute. Pioneer argued amongst other things;
- FOS must correctly decide on questions of law (arguing that the debts were collectable and enforceable in Australia).
- Whether there is an implied term that FOS must not act as a court (arguing FOS acted as a court and is not allowed to act as a court).
- There is an implied term that FOS must not act unreasonably (by allowing the debts to become statute barred).
The Judge in the Victorian Supreme court found;
- FOS "is only required to have regard to
applicable legal principles.
It is also clear that that is only one of the matters to be taken into account.
Therefore, it cannot
be that FOS is required to apply legal principles to the
exclusion of all else, nor that it will be in breach of the Membership Contract
should it fail to apply the law strictly".
- FOS did not act as a court, and there is no implied term in the contract for FOS to act as a court.
- FOS acted reasonably. a "legal standard of reasonableness does not involve substituting a
court’s view as to how
a discretion should be exercised for that of a
The outcome for Pioneer
Amongst other things, Pioneer was ordered to pay approximately $110,000 in costs to FOS. The membership contract between FOS and Pioneer was held to be valid and binding on Pioneer.
Effectively the decision by FOS meant that one of the debts became statute barred and were not collectable and that this was a reasonable outcome, that is it was more reasonable for a debt to become statute barred for the debtor than for the creditor to completely lose its right to enforce a debt.
Monday, August 26, 2013 - Posted by Philip Harvey
This article has been sourced from http://www.armingheroes.org
and is a great insight to a side of the collection industry that is often overlooked.
Sergeant Jacob Gayer served in the United States Army for nine years,
spending some of that time in Iraq. Gayer, who was honorably
discharged , had received many honors during his service, including an
Iraq Campaign Medal, an Army Commendation Medal, an Army Achievement
Medal, a Global War on Terrorism Medal, and others.
other men and women who have put their country first by serving in the
military, Gayer came home with Post-Traumatic Stress Disorder (PTSD).
Gayer, who has custody of a young daughter, also returned from overseas
with a significant amount of debt to be reckoned with, including a
balance owed on a credit card that had ballooned from $5,000 to more
than $8,000 due to penalties and interest. There was no question the
debt was legitimate, but there was no way Sgt. Gayer was going to get
his own place to live without first satisfying the judgment on this
So he applied for a grant with ARMing Heroes,
the collection industry’s charity for military veterans. Little did he
know at that time that there are only two, maybe three, degrees of
separation between just about any two people in the industry. So when
the grant application was received, within days ARMing Heroes had
learned the account was purchased as part of a pool of accounts by a
debt buyer, and had already contacted a senior-level executive at the
company to discuss the matter and possibly obtain some relief for the
veteran. (For readers not in the collection industry, a debt buyer
invests in debt by purchasing a pool of delinquent accounts from a
creditor for less than the face value of what’s owed and then pursues
recovery of amounts legitimately owed.)
After communicating with
the debt buyer, several days before the holidays in 2012 the debt buyer
contacted ARMing Heroes and explained that they would not offer a
settlement to Sgt. Gayer. Doing that would have obligated them to send
an IRS Form 1099 upon settlement, forcing Jacob to pay taxes on the
difference. So they instead forgave the amount in full because of
Jacob’s military service and their desire to help veterans. ARMing
Heroes was able to tell this news to Jacob just before Christmas, and
sent him a $500 gift card for the family’s use over the holidays.
After his debt was cleared, Sgt. Gayer took the time to ARMing Heroes, saying:
care, concern, and dedication is amazing. The way that you helped me
and my daughter is a blessing that is unparalleled to anything that I
have experienced in my life. I am just a simple soldier and my lack of
words fails me, as I attempt to express the tears that are rolling down
my face at this moment. I feel that people should help one another, as
you have helped me. I will strive to be worthy of that help. Anytime
that I am able I will pay it forward.”
Thursday, June 27, 2013 - Posted by Philip Harvey
Suncorp recently announced it sold a $1.6 billion portfolio of corporate
and property assets for 60 cents in the dollar to Goldman Scahs Group
as a move to "de-risk" the Suncorp group. The portfolio was established
after the GFC and consisted of the former Corporate Banking, Property
Investment, Development Finance and Lease Finance divisions. It was part
of a "run-off strategy" of the Group to reduce risk and increase
It is difficult to ascertain how many accounts are secured and
paying from the Groups announcement. Given the debt purchase price of 60
cents in the dollar, there is reason to believe the accounts are
reasonably well secured.
Sourced from Suncorp (www.suncorpgroup.com.au/media June 2013)
Monday, January 07, 2013 - Posted by Philip Harvey
Have you considered selling your debts?
LCollect has recently obtained
its National Credit Licence to purchase debts. We are excited to be
able to offer this service to our clients in addition to all our
The potential benefits to your organisation of this service are;
immediate cash / income to your organisation for debts that have been written as bad
assist in reducing Ombudsman fees and charges on debts where complaints may be lodged
- free up your team to collect the early day debts or assist in other areas of your organisation as needed
LCollect will continue to protect your brand and reputation.
Provisions can be built into the contract allowing you to buy back
accounts under certain circumstances (such as complaints, commercially
sensitive information etc). As a holder of a National Credit Licence we
are a member of COSL and are required to apply all IDR & EDR
processes as set out (including hardship). We will comply with all
relevant legislation (including ASIC/ACCC Debt Collection Guide,
We would welcome the opportunity to discuss this further with
you. If you are interested but uncertain about a debt sale, we would
suggest a test of this service. If debt sale is of interest to your
organisation please contact us.